Friday, Nov 18 2011
• 10 a.m. (ET)

Friday News Roundup – Hour 1

The “super-committee” faces a Thanksgiving deadline with no real evidence of progress on a debt plan. New York police prevents protesters from shutting down Wall Street on the two-month anniversary of the “Occupy” movement. Energy secretary Steven Chu says the decision to approve the Solyndra loan was not based on politics. Newt Gingrich makes gains in the Republican presidential primary race but faces questions about his lucrative consulting business. And the Supreme Court agrees to hear challenges to President Obama’s health care law. Diane will discuss the week’s top national news stories with John Harwood of CNBC, Lisa Lerer of Bloomberg News and Major Garrett of National Journal.

Guests

Major Garrett
congressional correspondent, National Journal.

Lisa Lerer
politics reporter, Bloomberg News.

John Harwood
chief Washington correspondent for CNBC; reporter, "The New York Times."

Friday News Roundup Video

The Diane Rehm Show (http://wamu.fm/sCi0cJ): The panelists talk about this week’s arrest of a man accused of attempting to assassinate the president or his staff and explore the possible future of the Occupy Wall Street movement:

Transcript

10:06:56

MS. DIANE REHMThanks for joining us. I'm Diane Rehm. A 21-year-old man is charged with attempting to assassinate President Obama after allegedly firing two shots at the White House. Energy Secretary Steven Chu defends loans given to the now bankrupt solar company Solyndra. And Newt Gingrich is up in the polls even as he acknowledged his taking consulting fees from Freddie Mac. Here for the domestic hour of the Friday News Roundup: John Harwood of CNBC, Lisa Lerer of Bloomberg News and Major Garrett of National Journal. Do join us, 800-433-8850.

10:07:52

MS. DIANE REHMSend us your email to drshow@wamu.org. Join us on Facebook or Twitter. Good morning, everybody.

10:08:04

MR. JOHN HARWOODGood morning.

10:08:04

MS. LISA LERERGood morning.

10:08:04

MR. MAJOR GARRETTGood morning.

10:08:06

REHMAs we look at the work of the super committee, Major Garrett, where are we going?

10:08:15

GARRETTNowhere fast is the short answer. I wrote about this this week at National Journal. The super committee has been writhing in public and mostly in private over divisions that have become all too familiar in American political life about what to do with the fiscal future of this country, how much to tax, whom to tax and whether or not we change the entitlement structure, not of beneficiaries currently in the system, but those who may get in the system in the next five, 10 to 15 years.

10:08:46

GARRETTThese are not brand-new discussions. And they have broken down exactly as they've always broken down over Republicans refusing to want to embrace any sort of large increase in tax revenue or in any way jeopardize the future of the Bush tax cuts currently on the code and Democrats, very reluctant to do anything but change at the very edges or the margins, the overall entitlement structure of this country. The theory behind the super committee is that, by giving it special power, you could overcome these longstanding political divisions.

10:09:24

GARRETTI said this week that's a lie that politicians have been telling to themselves. I've never accused a politician of lying to voters because that basically insults their core approach to democracy. But what I think has been happening here in Washington is politicians have been looking at each other and telling themselves a big lie that process, giving them immediate access to the House floor, immediate access to the Senate floor, up or down, yes or no vote, no amendments, no filibusters, creating a procedural way can solve these underlying political differences. And I don't think it can.

10:09:56

REHMLisa Lerer, are we going to make any progress between now and Monday?

10:10:04

LERERWell, congressional leaders certainly aren't very optimistic. John Boehner said this week at a fundraiser that succeeding would be like pulling a rabbit out of a hat. I think part of the problem is, you know, the points Major was making about process, but also that there's no real -- nothing really actually happens if they don't get a deal until January 2013. That's when the automatic cuts go in place. And in congressional time, that's a lifetime from now. That's a really long time for them.

10:10:30

LERERAnd so you don't have the immediate pressure that you had with the debt ceiling debate, where they just had to get something done, or the government shutdown debate, where we saw these deals coming together in the nick of time.

10:10:39

10:10:47

HARWOODWell, the possibility is that you could agree -- if you're talking about revenues, you could agree on targets of amounts of money to be raised through revenues and then kick it to the tax-writing committees to resolve the specifics of those next year. I think they're likely not to do that in the end 'cause if they don't get an agreement, they're not going to have anything. But as Lisa mentioned, they've got a year cushion built in.

10:11:10

HARWOODAnd if you want to look on the bright side of this, you say, that's what big elections ought to be about: the future of tax rates, who gets taxed, as Major said, what happens to these entitlement programs, and I would like to sound one other unlikely note of optimism, which is that even if they don't get a result, it is possible to look at what's happening as a slow motion bit of progress. It's glacial. It may feel like waterboarding while we're going through it.

10:11:38

HARWOODBut the Republicans have now conceded that more tax revenue needs to be raised. Democrats have conceded that entitlement programs need to be cut. And now, we're haggling about how much in both cases, may not get settled next week, may not get settled even next year. But it may be that the system is slowly moving toward a solution.

10:12:01

REHMLisa.

10:12:01

LERERAnd the economy could also put new pressure on lawmakers. I mean, the economic consequences of this could be very real. Stocks were down yesterday, in part, because, you know, folks on Wall Street don't see any progress on this. It could undercut consumer confidence right before the holidays, depressed consumer spending. And if, you know, a lot of lawmakers, Sen. John McCain for one, are talking about ways to sort of soften the blow of these mandatory cuts, if that were to happen, if the cuts weren't enacted in January 2013 or a plan wasn't devised, the rating agencies have warned that they could, you know, we could face another downgrade.

10:12:36

REHMWhat about the fact that some Republicans are talking about a silver lining to a sequester?

10:12:45

GARRETTWell..

10:12:45

REHMAnd explain the sequester.

10:12:46

GARRETTWell, the sequester is the across-the-board spending cuts, whereas if the committee does not achieve $1.2 trillion in deficit reduction, which all outside budget analysts concede would be the lowest benchmark of success imaginable. That's really an arbitrary number created because that's how much the debt ceiling was raised. It doesn't have anything to do with the long-term future of the country.

10:13:08

GARRETTIt's just a number by which they raised the debt ceiling, so they had to come up where it leaves that much to offset it. Okay, if this super committee doesn't succeed and January 2013 comes along and nothing has happened in the next year, meaning the election year of 2012, then these cuts would happen across the board with no intervening decisions about where and why and how. And about half of those would fall on the Defense Department or security funding broadly defined: homeland security and defense.

10:13:35

GARRETTRepublicans do not want that at all. And what they want for 2012, if the super committee fails, is a very intense focus on, well, do you want to have this many defense cuts? Politically, they think that's advantageous for them. I want to pick up on a point that John made. I'm very down on the super committee. I have been from the very beginning, but I do believe it's a clarifying moment because now lawmakers can look themselves in the eye and say, you know what? Process doesn't trump everything.

10:14:00

GARRETTWe have to deal with these issues directly. And we're going to have a big election coming up, and one of the underlying themes of this election is going to be what road are we going to take. Are we going to take the Obama road, or we going to take the Republican road? And the super committee's inability to wrestle with these things will clarify those issues even more sharply, in my opinion.

10:14:15

REHMBut somebody is going to get blamed, and what I'm wondering about is who, John Harwood?

10:14:27

HARWOODWell, the Obama administration is counting on the fact that Congress is going to get blamed. They're keeping some distance from this process. Republican leaders are saying Obama wants this to fail so he can run against us, not a bad idea if you're Barack Obama looking at a Congress with approval ratings in the single digits or near that. You know, the bottom line is we have a divided government, so both sides take some heat.

10:14:53

HARWOODBarack Obama, as the incumbent and chief, will take some heat for this, but I think American people are so used to failure and gridlock by their elected officials, I'm not sure this will introduce some independent new variable in the election. And, interestingly, some of the people on Capitol Hill that I talked to don't think that the financial markets are going to react negatively to no deal because they also expect gridlock.

10:15:18

HARWOODAnd as long as the sequester, the automatic cuts that Major was explaining, remain on the books, they can at least say when they try to evaluate the fiscal health of the United States, well, at least those remain on the books. If they were somehow to suspend the sequester and aviate the need for those cuts, then I think you would see a big negative reaction from financial markets.

10:15:37

REHMLisa, what do you think?

10:15:39

LERERI think that's exactly right. If the cuts don't get enacted, we'll see a huge reaction particularly from the ratings agencies. But, you know, in the meantime, it's hard to bet. I think the dynamic with the financial markets is a little bit different just because of what's happening in Europe, and there's a really big fear that that could spread. Some of that turmoil could spread here.

10:15:57

LERERSo I think it is a slightly different situation than during the debt ceiling when they were all saying, oh, you know, we expect this to come down to the wire. So I'm not sure. I'm quite as confident as the folks on Capitol Hill, but we'll see how it goes.

10:16:10

REHMAll right. We seem to be learning about the extent of insider trading by members of Congress. What are learning, John?

10:16:22

HARWOODWell, we're learning -- and "60 Minutes" dramatized this the other day -- that members of Congress who are intimately connected with decisions regarding regulation, taxes, the future of sectors and industries and the economy don't have too many restrictions on how they trade. Now, I'm not certain, and I have to say upfront I'm not inclined to believe that many members of Congress are actually executing what anybody would consider insider trading.

10:16:56

HARWOODAnd a lot of the information that members of Congress have is generally possessed by lobbyists and by reporters and others covering these industries, but it is an area that makes them targets for criticism. Scott Brown, the senator from Massachusetts who's in electoral trouble from a consumer-minded Democratic opponent, has now offered an insider trading restriction bill. And I think that's an issue that is going to be on the table for the next few years.

10:17:22

REHMSaying that those who are engaged in the insider trading ought to go to jail, Lisa?

10:17:29

LERERThis is a not a new issue. You know, there was a bill introduced on this in 2006 by Congresswoman Louise Slaughter, and certainly when all the financial reports come out, every reporter in town goes through them and says who traded what when. That's something we definitely do at Bloomberg. I think, now, there's a political moment that's right for something to possibly actually happen. There's a strong anti-Washington mood. People are very concerned about that.

10:17:51

LERERCongressional approval, I think, has been in the single digits in some polls. So it's not a new issue, but it's one that seems like it's getting a bit more attraction right now.

10:17:58

REHMWhat names have we heard?

10:18:01

GARRETTWell, "60 Minutes" raised these questions with Speaker Boehner, House Minority Leader Nancy Pelosi and others. I agree with John. I don't think this is classic insider trading of the kind that if you're in Wall Street and you know something is going to happen instantaneously or tomorrow morning with a company and you move or shift stock simply because you possess it and you alone possess that knowledge -- that's classic insider trading.

10:18:27

GARRETTThis is more notional sense of where things are going in a regulatory or legislative frame, but there needs to be more transparency. It's a very opaque process, and Congress does not have the kind of disclosure requirements others should have. And it seems like that's where they're -- it's going.

10:18:41

REHMMajor Garrett of National Journal, Lisa Lerer of Bloomberg News, John Harwood of The New York Times and CNBC.

10:20:04

REHMAnd we're back with the domestic hour of the Friday News Roundup this week with Lisa Lerer of Bloomberg News, Major Garrett of National Journal, John Harwood of CNBC and The New York Times.

10:20:21

REHMHere is an email from Jason in Kalamazoo. He says, "One of your commentators said Republicans agreed about the need for new revenue. My understanding is the Republicans agreed to quote new revenue only if the Bush tax cuts are extended indefinitely. This results in a net reduction to revenue amounting to trillions of dollars over the next decade. How can this be categorized as Republicans agreeing to new revenue?" John Harwood.

10:20:59

HARWOOD'Cause I think the correspondent is wrong about that. I think Republicans have proposed yes -- not only extending the Bush tax cuts, but lowering the top rate. But they're proposing to limit -- curb deductions and other tax preferences sufficiently to produce a net gain of tax revenue. So I believe it is a -- can fairly be called a tax increase.

10:21:24

REHMAll right. Let's talk about Supreme Court's agreement to hear a challenge to the 2010 health care overhaul law. What is the challenge, Major?

10:21:37

GARRETTWell, there are three basic ones, and the court has agreed to take up all three and devote five-and-a-half hours of oral arguments over two days, an extraordinary...

10:21:45

REHMFive-and-a-half?

10:21:47

GARRETTYou can tell that the Supreme Court is telling the country, this is a very big issue, and we intend to address it many different ways. One, is the individual mandate constitutional? Critics say it is an overreach. There is no constitutional justification that can be found to require people to purchase health insurance. They may not choose to purchase. They may not want to purchase, and the government cannot order them to do something they would not like to do.

10:22:15

GARRETTThe other question is severability. If you rule on the individual mandate and say it is unconstitutional, can the remainder of the law stand? The third thing the court has taken up, which interestingly all the underlying courts which have been divided on the first two questions I've mentioned have been completely unanimous about, but the court's going to visit it anyway, is, can the federal government order states to expand eligibility for Medicaid? And all the underlying lower courts have said, sure, you can.

10:22:41

GARRETTBut there are those who are court watchers who's saying, wait a minute, the court's taking this issue on and it has to be a reason. And if the court says no, then many of our longstanding understandings about the reach of the federal government in telling states how to deal with state and federal joint entitlement programs could be brought into question. Those are the three big issues.

10:23:02

LERERThis is going to be an extremely -- obviously, an extremely, extremely political decision in moments coming in the midst of the -- it'll come in the midst of the election. Already, Herman Cain called for Justice Kagan to recuse herself, 'cause she was at DOJ during that time, although she was very...

10:23:17

REHMDepartment of Justice, was she?

10:23:19

LERERYeah, yeah. Department of Justice, although she was very careful to have -- reports say that she was very careful to have little to do with the health care law. And it's not quite clear what the political consequences could be if they rule -- if the court rules against the administration. You know, the Obama campaign could use it as a rallying cry, like Democrats said with the Citizens United case. If they rule against, you know, the Republican signed of things for the law, then, you know, there could be a backlash, and that could help the Republicans. But it's -- there's no question it'll be unbelievably heated.

10:23:49

HARWOODI will say that there is more expectation than I would have thought that this court, which has a majority of Republican appointees, will uphold in the end the individual mandate. The White House is pretty confident with that.

10:24:01

REHMWhy?

10:24:03

HARWOODBecause of looking at the past precedent that sitting justices, their interpretations of the ability of the federal government, the authority of the federal government under the Commerce Clause to regulate things like this individual mandate. So there is some belief that there's precedent, and it's not necessarily going to be a Bush v. Gore deal, where all of the Republican appointees vote one way, all the Democratic appointees vote the other way.

10:24:30

REHMWhat is the precedent for five-and-half hours of hearing time? What other cases do we know that the court has devoted that kind of time to?

10:24:44

GARRETTI know of no previous precedent.

10:24:45

REHMReally? Interesting.

10:24:46

GARRETTI've been here in Washington since 1990. I'm not a court watcher. I don't spend my days and hours obsessing over their schedule, but I have no recollection of a public discussion of a case of this duration. And this will again raise the issue of televising. C-SPAN has asked that these oral arguments be televised for the first time. The court probably won't do it, but I think it might serve the public very well 'cause oral arguments are amazing thing to watch.

10:25:13

REHMOf course.

10:25:13

HARWOODI've watched and sat, and they're fantastic. And they really do help you understand the jostling, both legal and otherwise, over fundamental issues.

10:25:20

REHMSo five-and-half hour oral arguments by March, a decision in late June. How do you see the political fallout from this, Lisa?

10:25:33

LERERWell, I think it's not entirely clear as I was saying before. I think the side that it is ruled against, there could be a backlash. It could sort of empower voters on that side, or it could be a validation for the Obama administration. I think it's certainly going to depend on who the Republican nominee is, and we should have one by that point. So if it's Mitt Romney, as many people expect, it's sort of a more difficult, more complicated -- the politics are a bit more complicated.

10:26:01

REHMYou just said...

10:26:01

HARWOODAnd think about how complicated because Mitt Romney, of course, enacted in Massachusetts a state-level variant of the Obama plan. And so it's going to be a tricky argument for him to make on this. He's trying to -- he's developed a rationale for saying that this is something that I saw as a state-level solution that I wouldn't impose on the rest of the country, but not so easy for him to take off as it might be for another Republican on this issue.

10:26:27

REHMLisa just said something fascinating, that many people now expect Newt Gingrich (sic) to be the nominee. Is that what you said?

10:26:38

LERERNo, I said, Mitt Romney. Mitt Romney.

10:26:39

REHMOh, forgive me. I thought you said Mitt -- I thought you said Newt Gingrich.

10:26:43

LERERBut, actually, I have had some Republicans tell me, you know, after it was announced that the court would be hearing this, Republicans that are sort of in the anti-Romney camp -- and there is a large swath of them still -- say that this -- the fact that the argument is coming at this time and the decision will be coming in June, undercuts his electability that, you know, it sort of takes this -- it makes it much more complicated.

10:27:03

LERERAnd some say it takes this health care issue off the table to have Romney be their nominee. So if they want with somebody else, they could really jam on this issue, which will be in the public, you know, will be particularly in the public at that time

10:27:14

HARWOODOf course, Newt Gingrich has also supported an individual mandate in the past. So again, there are more complex angles to this than appear on the surface.

10:27:23

REHMWhy is he rising so much and so quickly in the polls, John?

10:27:28

HARWOODWe have seen a phenomenon over a series of months of alternatives to Mitt Romney in the field rising and falling, and the reason that that's happened rather easily is that there are no fully competitive candidates other than Mitt Romney. We're used to covering presidential campaigns, and you have a -- usually, at least two, if not, three candidates who have all of the following attributes. They've got a record. They've got a sense of gravitas, which is generally accepted. They've got a financial, an electoral base. They've got organizational infrastructure in the key states.

10:28:07

HARWOODMitt Romney has all those things. Not one other person in this race does, and therefore, it's a very malleable field. People easily go up, and they easily go down. And Newt Gingrich is now in the process of having both of those things happened to him because he's risen in the polls. We asked him in a debate last week about the money he got from Freddie Mac. He offered an explanation. Lisa and her colleagues at Bloomberg found out that it was a lot more money than that. And it's not quite what he said in the debate. It's a problem for him.

10:28:39

REHMLisa.

10:28:40

LERERRight. It was as much as $1.8 million, which is really a significant amount. And, of course, Freddie Mac is just anathema of the conservatives. They -- conservative Republicans, they really don't like it. So that's a problem for him. I think the other thing, and, you know, no disrespect to my two -- I'm sitting between two excellent debate moderators.

10:28:58

LERERBut there have been so, so many debates this campaign season, and that has really changed the dynamic because it's allowed someone like Newt Gingrich or even Herman Cain, who are quite good in that format, to really get a strong boost in the polls. But I think this issue of infrastructure really cannot be -- I think it's getting a little bit lost in the shuffle, and I think it matters. Herman Cain, for example, basically has one guy up in New Hampshire. I think they've hired a few more people.

10:29:22

LERERBut he really has this one aide up in New Hampshire who is a retiree from Pennsylvania that moved up because he just really likes Mr. Cain. They don't have an operation there. And that -- you know, you see that. That'll hurt once we move into the retail politicking phase.

10:29:35

REHMMajor Garrett, how much is the Freddie Mac stuff likely to hurt Gingrich?

10:29:43

GARRETTIt'll hurt him for a couple of reasons. One, his answer to John was not clear. It wasn't accurate.

10:29:47

REHMWhat did he say? What did he say?

10:29:49

GARRETTHe said he gave them historical advice and argued against...

10:29:50

HARWOODHe said he got paid as an historian, which there aren't too many $300,000 historians.

10:29:55

GARRETTOr $1.8 million.

10:29:56

HARWOODAnd I don't think there are any $1.8 million historians.

10:29:58

LERERAnd, actually, what we found out is, you know, some of my colleagues spoke to people at Freddie Mac, in fact, he was charged with doing -- was talking to conservatives and convincing them that the Freddie Mac model was not -- was good and should be applied widely, like to organizations like NASA.

10:30:13

HARWOODWhich, by the way, was what I asked him in the follow-up because...

10:30:16

LERERRight.

10:30:16

HARWOOD...I said, what did you do for the money? And he said, I gave them advice, which they didn't take as an historian…

10:30:22

GARRETTWhich is a bad model.

10:30:23

HARWOOD...and I said, but you weren't trying to fend off conservative criticism of Freddie Mac? And he said, no, no, no. No lobbying whatsoever. It's not quite as straightforward as...

10:30:34

REHMMajor.

10:30:34

GARRETTIt's not as straightforward, so that's a big problem. When given an opportunity to say declaratively what he did and didn't do, the speaker dissembled, and dissembled in a public forum, and that's going to -- that has been haunting him for the last seven days. Second, it reminds people why Newt Gingrich did not get off to a very good start in this campaign in the first place.

10:30:50

GARRETTHe was viewed accurately, as yesterday's news, as an establishment figure in the Republican Party of the '90s, of the '80s and '90s, a significant one, an intellectual heavyweight, to be sure, a speaker who confronted Bill Clinton, clashed with him, but then they resolved a lot of policy differences and made a lot of things happen in 1996, and then, with a lot of conservatives behind him, went sort of, many Republicans think, haywire on impeachment and overvalued the importance of that, both as a political matter and a matter of constitutional conflict with the White House, and that began to -- that led to his undoing as speaker.

10:31:28

HARWOODAnd think about it, Diane. Newt Gingrich, from the beginning of his career, has essentially taken on opponents by calling them corrupt, right? Corrupt liberal welfare state was what he said when he was rising as a Republican leader in the Congress. Lately, he has been talking, as other Republicans have been, against the corruption of these mortgage giants. He said that Barney Frank and Chris Dodd, who protected them, should go to jail.

10:31:56

HARWOODNow it's turned out that this organization that fellow Republicans say is corrupt -- Michele Bachmann on that stage talked about the millions going to officials that -- of Fannie Mae and Freddie Mac. Now we know that he got $1.8 million. He says he wants to bring transformational change to Washington. How exactly is he different from the corruption if he was getting that much money?

10:32:21

REHMLisa.

10:32:22

LERERAnd there's also, again, this question of his campaign infrastructure. As of the last reporting quarter, he was in debt -- I mean, deeply in debt. So, I mean, he's -- I'm sure he's -- we don't have a number yet. It's likely he's raising more money 'cause his numbers -- his poll numbers are up. And when that happens, you tend to bring in more money. But he has to overcome these debts.

10:32:39

LERERAnd the idea of his campaign was to run this very untraditional campaign that was mostly online, Facebook, Twitter, and not a lot of, you know, staff in early voting states, not a lot of, you know, action on the ground. But winning Iowa, winning New Hampshire, still requires getting people to the polls, getting your supporters there, getting your delegates there…

10:32:57

HARWOODVotes. It requires votes.

10:32:58

LERER...getting -- it requires votes.

10:32:59

REHMYeah. Yes.

10:33:01

LERERAnd you can't get votes unless you have people helping you do that. It's not clear that his campaign has an apparatus to do that.

10:33:06

REHMLisa Lerer of Bloomberg News. And you're listening to "The Diane Rehm Show." And in case you're listening, according to Reuters, the last time the Supreme Court listened to oral arguments for five-and-a-half hours was in reviewing the death penalty cases of 1976, a little factoid to...

10:33:33

GARRETTThank you.

10:33:33

REHM...put into your...

10:33:35

GARRETTI would have been mortified if you'd said 1999.

10:33:39

REHMWhen were you born?

10:33:41

GARRETT1962.

10:33:42

REHMOkay. Now, let's go back to...

10:33:45

HARWOODStop bragging.

10:33:45

REHM...the candidates. Herman Cain had some trouble with the question on Libya. Lisa.

10:33:53

LERERYeah, that's exactly right. He paused for a very long time. He couldn't answer the question, and he asked for a lot of clarification. It was about whether he agreed with what the administration did in Libya. It was not a good moment for him.

10:34:06

REHMIt was a one-on-one interview, was it not?

10:34:09

LERERWell, it's at an -- it was with an -- the editorial board...

10:34:11

GARRETTEditorial board.

10:34:12

LERERIt was with an editorial board.

10:34:12

REHMOkay. All right.

10:34:13

LERERHe later said in New Hampshire that he, you know, people need a leader, not a reader, and he called it, you know, a powerful pause or -- and so he's trying to sort of come back from that, but this is one in a number of stumbles, particularly on foreign policy, for him. And he also turned down a request yesterday by the Union Leader, which is the most powerful newspaper in New Hampshire, to do another editorial board because he didn't want it to be videotaped by C-SPAN, as is traditional for when they do this with all the candidates.

10:34:42

LERERHe tried to -- it was supposed to be an hour. He tried to cut it down to 20 minutes. The paper said that they weren't going to do that. He said he wasn't coming. And then later he said that, you know, the paper had rejected him. This is not exactly what you want to do, traditionally, with the most important newspaper in New Hampshire, the state that votes second in the presidential process. So there are some questions about his recovery and how that's been going.

10:35:06

HARWOODAnd, Diane, when you think about influential conservatives, the reaction among them, Charles Krauthammer, the columnist who carries a lot of weight among conservatives, said this shows that Herman Cain was in over his head. That is not what you want to happen. And it is, again, an illustration of what we were talking about a moment ago. You've got a bunch of candidates who don't really seem to have truly credible shots at the nomination.

10:35:32

HARWOODThey're interesting. They perform well on a stage from time to time. They can attract a following. But can they really go the distance? I was just with a bunch of Republicans at a meeting in New Orleans, the Bipartisan Policy Center. And all of the Republicans' operating presumption, the ones that I spoke with, was that there's only one guy who truly has a solid chance to win the nomination. That's Mitt Romney.

10:35:55

GARRETTAnd I would say that Herman Cain's problem on Monday was an extension of the difficulty he had at the debate that I've co-moderated on Saturday night on CBS. We put a lot of questions to Herman Cain, and we tried to structure our questions in a way that he could not recite talking points. But he would actually have to think, in public, through some very difficult national security and foreign policy questions.

10:36:15

GARRETTWe were not argumentative. We were not combative. We were not playing gotcha with him. We just put some very straightforward and tough questions to him. And he frequently fell back on I will check with my advisers. I will listen to my advisers. My advisers will tell me what to do. And I think if you look at the continuum of Saturday to Monday, people added those two things up and said, wait a minute, he really does not have anything that could pass even the most basic, fundamental litmus test of a world view or an informed notion or sense of these issues. He hasn't given them a lot of thought.

10:36:45

LERERAnd as a...

10:36:45

HARWOODAnd, Diane, that was crystallized when Major asked Herman Cain, Pakistan, friend or foe? His fundamental criticism of the Obama foreign policy was they didn't have it straight who our friends and who our foes were, and they were playing too much with our foes and not helping our friends enough. And Major asked him directly, what about Pakistan? He said, not clear.

10:37:08

LERERAnd as a result, you see his numbers dropping. We polled this week voters, likely voters in Iowa and New Hampshire, and his numbers had fallen. And that's part of the process as they hear more about him, as he -- they see that he doesn't quite have the answers to all these foreign policies. But even as they learn more about the policies he has put out, New Hampshire voters said to us that they didn't like his 999 plan because they have no sales tax right now, and then they would have a 9 percent one.

10:37:30

REHMLisa Lerer of Bloomberg News, John Harwood, Major Garrett. Short break. And when we come back, your calls, your questions. I look forward to hearing from you.

10:40:04

REHMAnd now it's time to open the phones. We'll go first to Pinckney, Mich. Good morning, Carl.

10:40:13

CARLGood morning, Diane. I just want to express what, I think, is the general feeling across the country, the overall frustration with our government. Your panelists said the super committee is going nowhere fast. There's constant talk about raising taxes as opposed to cutting the huge costs of government. Congress seems to come over as stalemated and somewhat elitist. You know, the insider trading issue that came up on "60 Minutes" seems to illustrate that. Citizens can't seem to gain representation, at least as individuals.

10:40:51

CARLAnd I think that that's been somewhat vaguely expressed by the Occupy movement. They're somewhat unfocused but, I think, expressed this general frustration that our government is broken. We don't know who to believe, don't know who to vote for, feel like we ought to vote everybody -- all the incumbents out of office. And I'm interested in your panel's reaction to this comment.

10:41:17

REHMMajor.

10:41:18

GARRETTWell, the caller brings up what has been constant in American politics for the last couple of years, the sense of frustration. It was evident when the economy collapsed. President Obama came in. There was a great sense of hope and expectation. Two years of unified Democratic control. The White House, the House and the Senate produced a tremendous amount of legislation meant to address some of these underlying issues, meant to let people know that, from a Democratic perspective, these frustrations were being addressed and dealt with.

10:41:52

GARRETTThen you had a bounce back or snapback election in 2012 that put all of that on hold, and what we've been involved in since that 2010 election has been a pitched battle over literally millimeters of political space in this town. Everything is a fight. Disaster assistance is a fight. What used to be considered an absolute obligation, bipartisan obligation of governance -- debt ceiling, an unfortunate, unhappy, unpleasant aspect of governing, but nevertheless, a requirement of governing.

10:42:25

GARRETTWe now fight over things that used to be understood as requirements of simple governing a mature, 21st century, first-world economy, and we can't seem to get beyond that. And the second point I would make from -- based on what Carl said, Occupy Wall Street is now being moved out of many of the cities. And one thing I heard yesterday was sort of thematic about it is, why don't we just all go to Washington, camp out there? That's where the problem is.

10:42:54

GARRETTWhy don't we just sit there and point at the lawmakers and say, address our concerns, come talk to us? I'm not sure that's going to happen, but it wouldn't surprise me if it did.

10:43:02

REHMLisa.

10:43:03

LERERWell, and it's certainly something you're seeing on the campaign trail. The Obama administration is eager to campaign against Congress and position themselves as, you know, as much distance from Congress as possible, which is sort of giving them, even though he's the president, he's certainly of Washington. He's trying to separate himself from Washington. On the Republican side, every single candidate is trying to put their distance between themselves and Washington.

10:43:24

LEREREven Newt Gingrich, who, of course, is -- had a long, long career in Washington, and Gov. Perry of Texas, who's been desperately trying to resuscitate his career after his brain freeze in one of these debates, released a plan this week that would really overhaul the entire system, you know, that would make Congress a part-time job, that would stop the Supreme Court from being a lifetime appointment. And they see that kind of really bold, fundamental reform change in Washington as something that could help them get back their numbers.

10:43:56

HARWOODDiane, could I speak up for the 9 percent, by which I mean the approval rating of Congress? The -- to some degree, the frustration that Americans feel is, if they really think about it, frustrations with themselves because the gridlock that we see in Washington is, in fact, a reflection of the complicated crosscurrents within voters who want their taxes lower than the amount of government they want to pay for. So people like their Medicare benefits. They like their Social Security benefits.

10:44:31

HARWOODThey like air traffic control and environmental protection and national parks and all the things that cost money. And they don't like taxes, especially when they're feeling so insecure about their economic future. So to some degree, the lawmakers have the unfortunate job of resolving these contradictions, and it's not easy.

10:44:49

REHMHere's a tweet from Kevin. "Didn't Newt Gingrich say at one time that Barney Frank should be tried for treason for his support of Freddie and Fannie?"

10:45:02

GARRETTI don't know about -- I don't recall...

10:45:04

HARWOODThat was Perry and Ben Bernanke, the Fed chairman.

10:45:06

LERERYeah.

10:45:07

HARWOODThat was the treason case.

10:45:08

LERERRight.

10:45:08

HARWOODThis is just a simple jail case.

10:45:10

REHMOkay.

10:45:10

LERERRight, right.

10:45:10

GARRETTYeah, yes. Yes.

10:45:11

REHMAll right. Okay. Let's go Peoria, Ill. Good morning, Paul.

10:45:18

PAULGood morning. How are you this morning?

10:45:20

REHMFine, thank you, sir.

10:45:22

PAULMy -- I'm kind of -- the fellow who just called in, I kind of go along with him with a lot of this stuff. I think our representatives, Democrat or Republican, need to -- have to live up to the same standards that the average workers does. I'm a blue-collar worker, retired. And I agree, I like my health care and things like that, but I've also paid for my own insurance and everything there all my whole working life.

10:45:50

PAULAnd my retirement plan, that came out of my money. The congressmen and senators, they get a free ride on that. I mean, they get (unintelligible) in their two terms, they get a pension for the rest of their life that is more than what any of us have to work in 50 years.

10:46:07

REHMYou know, that's interesting because one of our other callers said, "Why is it that so many non-millionaires come out of Congress with much greater net worth than when they come entered?" Lisa.

10:46:24

LERERWell, a lot of them come into Congress with a pretty great net worth. I mean, the proportion of millionaires in Congress is significant, particularly in the Senate. It's significantly higher than in the general population, which is something that came out once again when they started talking about the insider trading bills, which we were just talking about so...

10:46:41

REHMAll right. Thanks for calling, Paul. Here's an email from Mike in Connecticut. He said, "I'm puzzled by the fact that people defend candidates like Herman Cain for not needing to understand all the aspects of foreign policy to become president. They claim his experience as a businessman is enough. Would they have the same notions of lack of experience if they were going to a dentist or flying on a plane?" Why is a lack of knowledge on foreign policy a good thing, John Harwood?

10:47:25

HARWOODI would not argue that it's a good thing at all. Now, having said that, there is no job that prepares you for the presidency before you're in the presidency, so what you can hope to find from a presidential candidate is somebody who is intelligent, who reacts well in a crisis, who absorbs information and can make good decisions on the fly. Knowledge and experience helps you do that. It's not an absolute requirement.

10:47:56

HARWOODAnd many people elected president in recent decades have been governors who didn't have foreign policy experience. But I don't think there's any way in which lack of knowledge is actually a positive.

10:48:07

REHMOkay.

10:48:07

GARRETTI don't think it's working for Herman Cain. I think he's falling in the polls much more so because of this now clear lack of knowledge and lack of...

10:48:16

REHMNot the sexual scandals?

10:48:17

GARRETTNo, no.

10:48:18

REHMOkay.

10:48:18

GARRETTYou look at his numbers in Iowa. They remained stable for that, but they're dropping now, I think, is a direct result of people saying, wait a minute. He doesn't -- he's not ready, and, therefore, I'm less ready to follow him.

10:48:27

REHMLet's talk about Steven Chu, the secretary of Energy who testified before a House subcommittee on his department's loan guarantee and grant program in the Solyndra case. How did that go, Major?

10:48:45

GARRETTWell, the secretary said he made no decisions based on politics. He took full responsibility for what is, quite clearly, an enormous embarrassment for the administration. The administration wants to project the capability and the future viability of green jobs and green technologies. Solyndra was one of many companies that also attracted, at the front end, a substantial amount of private investment. It's not as if Solyndra only lived and died based on half a billion in federal aid.

10:49:13

GARRETTHalf a billion dollars in federal aid certainly helped and kept investors around, but there were plenty of private sector investors there at the beginning. There was an enormous shift in the green technology market. China, understanding that it is in a global competition with the United States and everyone else, dramatically lowered its production cost for solar panels, trying to eat America's lunch as we're just getting in to this facet of the economy.

10:49:40

REHMAnd thereby, Solyndra tanks.

10:49:42

GARRETTSolyndra tanks. Now, there is one decision that I think the administration must explain more carefully. Why was it that the private investors were taken care of first and the taxpayers were placed behind them? That is a decision that did not have to be made, that you could say, look, you're a private investor. You take the risk like everyone else. But they got their cash, what cash was -- they were able to get out of Solyndra, before the taxpayers did.

10:50:07

REHMAnd there's another question about the administration shift on smog. What happened there, Lisa?

10:50:16

LERERWell, the administration had come in, saying that they wanted to do more to tighten the Clean Air Act and, you know, make tougher standards for smog and attack the issue of climate change. They ended up pushing off -- they went through a whole legal review. There was a legal ruling, and then they did a review at the Environmental Protection Agency. They ended up pushing off that decision.

10:50:39

LERERIn part, this is, again, this is a highly political issue, and it's one that's particularly dangerous for -- in the Midwest, where there's still a lot of manufacturing, industrial activity that would be hit hard by these new rules. There's a bunch of Democratic senators in the Midwest who are up for re-election right now, like Bob Casey of Pennsylvania, Claire McCaskill. They've lobbied against -- they've lobbied to take it slower on these rules.

10:51:05

LERERThey certainly have lobbied the administration. Business is really against increasing the standard for smog. So in the end, the administration sided with those groups and decided to delay.

10:51:18

HARWOODBig time re-election politics for Obama in that decision and for those Democratic senators at least...

10:51:23

GARRETTAnd it's a classic application of presidential power. In the one respect, you had jobs that are currently existing, threatened by more intense strictures on ozone-related pollution. Then you had the Keystone pipeline decision, jobs that don't currently exist but that may exist. It was possible for that decision to be delayed as it has been because it didn't jeopardize jobs that currently exist.

10:51:47

GARRETTOzone regulations would have jeopardized jobs that do exist, and the president chose not to harm the jobs that do exist and delay the ones that might be created.

10:51:56

REHMAll right. To Winston-Salem, N.C. Good morning, Gray.

10:52:01

GRAYGood morning. Just a quick point. I think that it's great that we're getting all the scrutiny for these Republican candidates. And although many Republican primary voters don't particularly want Mitt Romney, I don't think that you're going to have trouble with Republican voters not supporting whomever the nomination is. And I think that the vastly underreported story -- it goes back a couple weeks ago -- is that in Ohio, where you had a very liberal turnout to -- by unions, supported by unions, to turn down Gov. Kasich's union plan against collective bargaining had a corollary vote.

10:52:40

GRAYAnd you guys talked about it then, but I just think that this kind of gives the tenor for the mood of the electorate. There was another item on the vote about the personal mandate in Obamacare, and it was defeated 2-1 by a very left-of-center block of voters. I think that the election coming in 2012 is going to surprise a lot of people. Whether the nominee is Herman Cain or Michele Bachmann or Newt Gingrich, I don't think it's going to matter.

10:53:08

GRAYI think that President Obama, for all of his oratory skills and his personal ability as a politician, coupled with the Congress that he had for the first two years of administration, has moved the country significantly left-of-center, and we still remain fundamentally slightly right-of-center.

10:53:27

REHMAll right, sir. Thanks for calling. And you're listening to "The Diane Rehm Show." What do you think, Lisa?

10:53:35

LERERWell, the conversation at Republican field right now in the primary is really for the spot of anti-Romney, right? That's what you see all these candidates battling it out for to be the one who's going to contest Romney during the primary process. And, you know, folks supporting those other candidates say that there is a very strong block of voters that don't want to support Mitt Romney. He has trouble breaking 30 percent in most polls, and they say there's this remaining number of people who wanted something else, and they want, you know, what their supporters say, a more authentic conservative.

10:54:06

REHMI want to ask you all about the bullet at the White House. That is quite a rifle that this guy had.

10:54:17

GARRETTOh, yeah. And it's always serious business. I mean, look, people can say the president was out traveling. Look, anyone shoots anything at the White House, it's serious, serious business. I've covered the building many times in my career. I know Secret Service. I mean, this is a huge deal, and the guy was captured rapidly just outside of Pittsburgh.

10:54:34

REHMHow?

10:54:35

HARWOODAnd by the way, it could have hit one of those...

10:54:37

REHMHow did they get him so quickly?

10:54:38

GARRETTWell, all I can do is quote from one of my favorite movies, "National Treasure," when Nicolas Cage buys the Constitution with a Visa card and his colleague says, Dude, we're on the grid. We probably have a satellite now. That's exactly -- the guy was on the grid in, like, six seconds and...

10:54:55

REHMReally?

10:54:55

GARRETTYes, he was on the grid. He probably had his own satellite, and they found him really quickly.

10:54:59

REHMHow...

10:54:59

GARRETTAnd he's been charged with trying to assassinate the president, who wasn't there, which is what you do in every one of these conditions. You shoot something at the president, you're going to be charged with assassinating him, whether he was 6,000 miles away or not. It's a serious crime, and he's probably going to do serious time.

10:55:13

HARWOODI agree with that. And I was just getting ready to say this is an issue close to home for people like Major and myself who have spent a lot of time doing live shots out of the White House. We're in a lot of fire out there.

10:55:25

GARRETTNo doubt.

10:55:26

REHMWell, now, you know, in sense, it sounds amusing, but in another sense, as you say, it's very serious business. I wonder how many times that's happened that we don't know about.

10:55:43

GARRETTShots at the White House, I don't think we -- I don't think that's ever been -- oh, let's not put that one out. No, it's always dealt with.

10:55:49

REHMAll right.

10:55:49

GARRETTAnd the Secret Service always wants to project that that's happened, it's transparent, and they're dealing with it.

10:55:53

REHMOkay. Somebody said earlier the Occupy Wall Street movement ought to move to Washington. Do you think that's what's likely?

10:56:03

GARRETTIt might, or it might just peter out in the wintertime. I don't think it's going to peter out entirely. I thought there was some -- I mean, when I heard on NPR yesterday someone screaming as they were being moved out, this is what a police state looks like, I mean, honestly, this is not a police state. If you're camping out for two months in a public place and you're gently but persistently removed after occupying something for two months, you don't live in a police state.

10:56:30

REHMLisa.

10:56:30

LERERAnd a lot of -- a lot more people are starting to agree with what Major is saying. Polling has showed that support for the movement has dropped particularly as reports have come out of the camps of, you know, sexual assault and all these other sort of horrible things.

10:56:41

REHMBut have they made their point, John Harwood?

10:56:44

HARWOODWell, they're making a point that many people in the country share, even if they don't support the movement. Seventy-six percent of the people at our NBC-Wall Street Journal poll said the economic system in this country tilted toward the rich. That's the core point of this movement.

10:56:56

10:57:03

HARWOODThank you, Diane.

10:57:03

GARRETTHave a great weekend.

10:57:03

LERERThank you.

10:57:04

REHMThanks for listening, all. I'm Diane Rehm.

10:57:08

ANNOUNCER"The Diane Rehm Show" is produced by Sandra Pinkard, Nancy Robertson, Denise Couture, Monique Nazareth, Nikki Jecks, Susan Nabors and Lisa Dunn. And the engineer is Tobey Schreiner. A.C. Valdez answers the phones. Visit drshow.org for audio archives, transcripts, podcasts and CD sales. Call 202-885-1200 for more information. Our email address is drshow@wamu.org. And we're on Facebook and Twitter. This program comes to you from American University in Washington. This is NPR.

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